Regulation and Risk: Evolution in Asia Pacific’s Climate Disclosure Requirements
Snapshot
- New international reporting standards will provide clearer, more consistent, and easily comparable information regarding an entity’s climate-related risks and opportunities.
- As more countries in the Asia Pacific region adopt the new standards developed by the International Sustainability Standards Board (ISSB), it is essential that entities start preparing now for these changes, reaping the benefits of being early adopters in the process.
In response to demands from investors, lenders and other key stakeholders for more consistency and comparable information on how climate might impact entities, the International Sustainability Standards Board (ISSB) has developed standards (specifically IFRS S2 climate-related disclosures), building on the recommendations of the Task Force for Climate-Related Financial Disclosures (TCFD).[1]
Several countries in the Asia Pacific region have already mandated, or are in the process of mandating, climate-related disclosures. This is a rapidly evolving environment with many jurisdictions in the process of passing regulations to adopt mandatory disclosure rules for entities, listed or non-listed.
This significant shift from a historic voluntary adoption of a climate disclosure framework to a mandatory standards-based disclosure means that entities which are affected must comply or risk facing action from the regulators.
As more entities are beginning to work on their disclosures, early adopters are currently benefitting the most. It is not just a compliance exercise – climate risk assessments provide an opportunity to identify previously unknown risks and opportunities and can result in a better understanding of business resiliency and protection gaps including the use of insurance as a solution.
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[1] IFRS, IFRS S2 Climate-related Disclosures, 2023, accessed August 2024
